How do you apply circular economy to your procurement?

1 What is circular procurement?

Circular procurement is the practice of considering the whole life cycle of products and services, from design and sourcing to use and end-of-life, and selecting the ones that minimize environmental impacts and maximize resource efficiency. It also involves collaborating with suppliers, customers, and other actors to create circular value chains and business models, such as leasing, sharing, repairing, refurbishing, or recycling. Circular procurement can help you reduce costs, risks, and emissions, enhance your reputation and innovation, and contribute to the sustainable development goals.

2 How to assess your current procurement situation?

Before you start implementing circular procurement, you need to understand your current procurement situation and identify the opportunities and challenges for improvement. You can use tools such as the circular procurement scan, the circularity gap analysis, or the material flow analysis to evaluate your procurement performance, processes, and impacts. You can also benchmark your procurement against best practices and standards, such as the ISO 20400 on sustainable procurement or the Circular Economy Procurement Framework. These tools can help you set your circular procurement goals, priorities, and indicators, and align them with your corporate sustainability strategy.

3 How to design your circular procurement strategy?

Once you have assessed your current procurement situation, you can design your circular procurement strategy based on your goals, priorities, and indicators. Your strategy should include a clear vision, mission, and objectives for your circular procurement, as well as the actions, resources, and responsibilities needed to achieve them. You should also define your circular procurement criteria, specifications, and requirements, and communicate them to your internal and external stakeholders. Your strategy should be flexible and adaptable to changing needs and circumstances, and incorporate feedback and learning mechanisms.

4 How to implement your circular procurement strategy?

To implement your circular procurement strategy, you need to integrate it into your procurement processes and practices, such as planning, sourcing, contracting, managing, and monitoring. You need to ensure that your circular procurement criteria, specifications, and requirements are applied consistently and effectively across your procurement categories, contracts, and suppliers. You also need to engage and collaborate with your suppliers, customers, and other actors to co-create circular solutions and value propositions, and to address any barriers or risks. You need to monitor and evaluate your circular procurement outcomes and impacts, and report on them regularly and transparently.

5 How to scale up your circular procurement strategy?

To scale up your circular procurement strategy, you need to leverage your influence and network to promote and support circular procurement across your industry and sector. You can join or initiate platforms, initiatives, or alliances that foster circular procurement collaboration and innovation, such as the Circular Procurement Community of Practice, the Circular Economy 100, or the Ellen MacArthur Foundation. You can also advocate and influence policy and regulation that enable and incentivize circular procurement, such as the EU Green Public Procurement or the Circular Economy Action Plan. You can also share your circular procurement best practices and learnings, and inspire others to follow your example.

6 How to benefit from your circular procurement strategy?

By applying circular economy to your procurement, you can reap multiple advantages, such as cost savings, risk reduction, emission reduction, reputation enhancement, and innovation stimulation. Cost savings can be achieved by optimizing resource use, extending product life, and minimizing waste and disposal fees. Risk reduction can be achieved by diversifying supply sources, enhancing resilience and security, and complying with environmental and social regulations. Emission reduction can be accomplished by lowering energy and material consumption, switching to renewable and recycled inputs, and avoiding landfill and incineration. Reputation enhancement is possible by demonstrating commitment to sustainability, meeting stakeholder expectations, and creating positive social and environmental impacts. Lastly, innovation stimulation can be encouraged by exploring new circular opportunities, solutions, and business models, fostering creativity and collaboration, and gaining a competitive edge.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?